Moody’s changes three Russian banks to negative

Moody's Investors Service said it changed the outlook to negative from stable on the long-term deposit, senior unsecured and backed ratings of Rosbank, DeltaCredit Bank and Rusfinance Bank, all three of which are Russian subsidiaries of Societe Generale (deposits A2 negative, standalone bank financial strength rating C- stable/baseline credit assessment baa2).

The outlook change reflects the risk that pressure will develop on the Russian banks' loss-absorption capacity, asset quality and profitability, because of: (a) The deteriorating operating environment in Russia (Baa2 negative) driven by the crisis in Ukraine (Caa3 negative); (b) the slowdown of the Russian economy (Moody's estimates GPD growth of 0.5% for 2014 and a GDP contraction of 1% for 2015); and (c) capital flight and restricted access to global wholesale markets for Russian issuers.

Concurrently, the agency changed the outlook to negative from stable on DeltaCredit Bank's and Rosbank's bank financial strength ratings of D (equivalent to a ba2 baseline credit assessment) and affirmed Rusfinance Bank's bank financial strength ratings of E+ (equivalent to a b1 baseline credit assessment, stable outlook) and the long-term deposit and senior unsecured and backed ratings of the three Russian subsidiaries.

Moody's said it bases its assessment of the three banks' ratings largely on unaudited financial statements for the first half of 2014 – prepared under IFRS – as well as unaudited local GAAP financial statements for the first nine months of 2014, and information received from the banks.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.